AUTOMATIC DATA COLLECTION - RADIO FREQUENCY IDENTIFICATION – RFID
By: Joanne Berridge
Date: November 3, 2004
There exist several technologies serving the same purpose of quickly and accurately capturing data. The key automatic data collection technologies include bar coding, magnetic stripe, radio frequency data communication, radio frequency identification, voice data collection, machine vision, optical character recognition, and smart cards.
Bar coding is an industry standardized symbol consisting of bars and spaces of various widths that are read by optical scanning devices. The width and position of the bars are actually coded combinations of numbers, letters or punctuation, used to “identify the item, its producer and any other piece of information necessary to control its movement”.1 (Anonymous, “Industrial Engineering’s 1992 Automatic Identification Buyer’s Guide”. Industrial Engineering, p.BG1) The item is scanned, all its data is transmitted directly into a computer via electrical impulses, generated from light reflections from the bars and spaces. The impulses are measured by a decoder, translated into binary code then transmitted to the computer. This technology is optimal for rapidly moving items commonly found on conveying systems within the retail and manufacturing arenas.
Magnetic stripe technology however, was initially instituted by the financial services industry to identify accounts and as a means of security. The magnetic stripe records greater volumes of information than many of the other aforementioned technologies, including bar coding. It provides a flexible format, with higher durability, and is highly secure. Data is encoded using electromagnetic charges that are read by a decoder, translated into numbers and letters, immediately identified by the computer. This technology is currently being applied to employee ID badges, debit cards, boarding passes for commercial flights, filling stations and some manufacturing applications. Future technical refinements include increased data storage on the magnetic stripe, resistance to extraneous magnetic fields and improvement of readers to process dirty or damaged magnetic stripes.
Radio Frequency Data Communication (RFDC) systems consist of battery operated wireless computer terminals, connected by a radio link to a main computer. Typically these hand-held terminals transfer real-time data from the shop floor, where the data is collected, directly to the mainframe computer. The devices utilize spread spectrum radio communication, which as the name implies, spreads the signal over a wide range of frequencies therefore ensuring “the signals are received, even if exposed to interference.”2
(Anonymous, “Industrial Engineering’s 1992 Automatic Identification Buyer’s Guide”. Industrial Engineering, p.BG6)
Radio Frequency Identification (RFID) tracks objects via an attached ID tag that sends and receives radio signals. The three components of RFID, a transponder (ID tag), an antenna and a reader operate in tandem as an electronic label. The antenna-equipped reader will transmit a signal which activates the tag, at which point the object’s data is read and sent directly to a host computer. Some systems offer more than identification of the object, they have writing capabilities that can add or delete information to or from the ID tag, thereby creating a ‘portable database’.
Data entry into systems can now be processed through voice technology, useful when the operator is unable to key in the data manually on a keypad. This technology allows the operator to speak the information into a microphone, using words from a pre-programmed language, which the system recognizes and converts to electronic impulses that are immediately processed by the host computer. As technology evolved to recognize voice commands, an imaging process, utilizing machine vision (MV) equipment can scan ID codes, objects or documents and interpret what it sees. Used mainly in industrial environments, it is more diverse than bar coding, as it is capable of restoring damaged codes and scanning in low contrast applications. Optimally this equipment is being used in manufacturing inspection areas, to validate component dimensions, positions or other structured type tasks. Similarly, optical character recognition (OCR), reads two-dimensional numbers or letters that are scanned by a light source then transmitted to a computer through electronic impulses. Using this symbol based system is ‘excellent for applications where labels must be read by both humans and machines’.3 (Anonymous, “Industrial Engineering’s 1992 Automatic Identification Buyer’s Guide”. Industrial Engineering, p.BG12)
One step beyond technological systems where equipment scans an identification code, a smart card uses an embedded microchip to carry large programmable databases. These cards, having the information storage capacity of a PC can distinguish between multiple services as well as provide security. One card could, potentially be used as a bank card, grocery club card and health card.
Any of the automatic data collection technologies discussed function optimally when integrated systemically throughout an entire operation or organization, resulting in shared information that increases productivity and reduces costs. In the current corporate environment, optimization of the manufacturing processes using emerging technologies also leads to increased accuracy and throughput, which ultimately drives an increase in sales and cost reductions.
In the warehousing field, consideration to radio frequency technologies, in particular, can increase competitiveness through total product cost reduction, increased accuracy, less paperwork, savings due to rapid invoicing and higher quality of customer service, in terms of reduced lead-times and availability of goods. Radio frequency systems have been used since the early 1980’s as a tool to obtain these advantages. There are three distinct types of radio frequency transmission technologies, narrow band, direct sequencing spread spectrum and frequency hopping spread spectrum. All have specific strengths and weaknesses and are appropriate in distinct environments. Narrow band transmission has a limited band width that transmits on its own channel with less interference, which requires governmental authorization, but offers increased power to cover a greater area. Conversely, spread spectrum technology has a greater band width, no channel exclusivity, can hold more information, requires no governmental licensing, but with a significant lower power level it only covers about one third the area of narrow band transmission. Many warehouses are reluctant to implement either type of RFID given the costs and the difficulty in evaluating its advantages. RFID should reduce costs by saving on resources (computer space, personnel and time), while also minimizing errors as the system verifies all operations with barcodes, and increased control of data since a permanent record exists of each operation. Although errors cannot be detected immediately by the system, a material or product can be placed or pulled from a non-specified location. However, once the error is detected the system will propose corrective action.
The cost of implementing RFID varies significantly depending on level of implementation and size of environment. Providing a comprehensive cost analysis, several assumptions must be made. In this example, let’s assume a manually operated distribution warehouse with limited computer control is upgrading its software to adapt to the implementation of RFID. Barcodes will be used to verify all goods movements, radio frequency will monitor all operational goods movements and lift trucks will be installed with hand-held mobile RF terminals. Establishing total operating costs of implementing RFID involves calculating total monthly costs pre-RFID, related to the movements of product within the warehouse. In the basic analysis, four types of operational goods movements exist; the goods receipt, the movement to the reserve storage area, movement from storage area to staging area and finally picking. Radio frequency decreases the number of journeys by eliminating the need to go to the office to receive documentation on incoming loads and then later returning to the office to hand in documentation. RFID will provide both the put away bin location, and strategically route the assignments of these bins, therefore eliminating wasted time trying to find an empty bin and the time of going to and from the office to collect new instructions. Replenishment stock orders between the storage and picking areas are automatically given by the radio frequency systems, ensuring that stock levels never fall below a specified level and also reducing the number of trips to the office area. The net benefit of a radio-frequency system as it relates to inventory errors is, once an operator transmits an incident or error, the system will automatically propose the corrective action to be taken versus manually resolving the issue, which slows down the process. RFID requires a stricter control of all inventory goods movement operations, but stock taking time is drastically reduced with little or no interruption to warehouse activity.
To substantially justify the cost savings that RFID brings to the stock taking operation, companies must be able to confirm total time and lost sales accrued in the non-RF environment. Other peripheral cost savings, inherent with implementing radio frequency, are reduced paperwork, as only bar coded labels, assigned to each material upon goods receipt, are the only forms used in the warehouse. The rapid processing of invoices is available due to fact that all data is in real time with radio frequency, meaning that invoices can be processed and sent once the order is prepared, therefore allowing the company to reap the benefits of collecting their money several days earlier.
The costs of radio frequency implementation directly relate to the cost of the hardware and software, maintenance costs and start-up costs. The basic equipment requirements of radio frequency consist of a controller, base stations and radio terminal. The controller is a fixed cost while the other two are variable dependant on size of warehouse and the number of operators. Software costs are completely dependant on the level of software development available in the operation, wishing to implement radio frequency. Can the current software be adapted to radio frequency data transmission or does a completely new system need to be purchased and configured? Costs attributable to the system start up, are varied dependant on the types of incidents that occur during start-up.
Evaluating an investment project in a data transmission system requires committing resources and tying up funds. It is imperative the scope of the project is defined by the current or optimal business processes and a choice between diverse system opportunities. The system must complement the current framework of the company, yet allow for future investments, upgrades or modifications all within an acceptable return on investment calculation.
There is no shortage of hardware and software firms or implementation specialists pitching the maturing integrated automatic data collection technology, known as RFID. It appears inevitable that manufacturers will track their products through their entire supply chain, while retailers will track theirs from source to customer. It will likely replace bar coding and its read-write capabilities will be used to track a product’s complete service history. What are the current market size estimates of RFID, who are the solutions providers and the leading users of RFID?
The data collected from RFID is processed in a real-time environment, analysed to provide inventory visibility and supply chain management. Typically an RFID tag is used to identify pallet, container or package information and currently ranges in price form $.20 to $1.00 each. Expectations are that the price over the next four years will drop to $.05 and potentially, allow tags to replace UPC bar codes on individual products. RFID tags are considered superior to bar codes because they are modifiable, can hold more data, and easier to scan because don’t require a direct line of sight to the reader. The readers that scan the tags, using wireless technology, currently cost $500 - $1,000 with prices also expected to fall, as demand increases and they become ‘commoditised’.4 (Stacy Pollard, “Software & IT Services; RFID: Radio Frequency Identification”. Lehman Brothers, p.4) Using real-time supply chain data in order to improve an operation’s process is the key benefit in the return on investment (ROI) analysis. The most crucial development required, in relation to RFID technology, is standardization. A joint venture organization, between EAN International and the Uniform Code Council, is dedicated to issuing a set of standards for both the tag and the radio frequency used. “It appears that Ultra High Frequency Generation 2 will be the reader standard; while the 850-930 MHz range is the likely frequency standard.”5 (Stacy Pollard, “Software & IT Services; RFID: Radio Frequency Identification”. Lehman Brothers, p.5) Estimates by independent research firms expect the total RFID applications worldwide market will grow to $7bn by 2008, with $3bn expected to be spent by manufacturers alone. With RFID driving an increase in available supply chain data, efficiency improvements will be recognized by manufacturers in inventory, production and asset visibility as well as product recall management and planning.
Key market leaders implementing RFID systems will drive international acceptance and help address some of the issues hindering acceptance of this technology. As Wal-Mart, the US Department of Defense, Boeing and Metro AG in Europe, implement and push RFID into the mainstream, the increase in demand should force the unit price of tags down to $.05 each by 2008. The read-rate technology of tags should also improve, as it is currently not at 100%, the global standards of operability should be set, and concerns by privacy rights activists addressed. Current technology is capable of tracking an individual product’s history from manufacturer, to shipment, to store, to shelf and eventually to customer, if credit cards are used for the purchase. As the retail, auto and aerospace industries adopt RFID and issue directives to their suppliers, key RFID solutions providers will be the conduit of this technology. Three of the largest European Software and IT Services providers including SAP AG, Capgemini and LogicaCMG already have the infrastructures to support multiple applications. They offer infrastructure management applications with automated systems, where information is available not only to the company, but its trading partners as well. IT Services offered include, strategic development, business case analysis, pilots, implementation and rollout.
As improvements in cost, tag size and functionality accelerate the proliferation of RFID technology, its uses will expand beyond supply chain management, airport baggage tracking, automated highway toll collection, animal tagging and secure building access. As the possibilities are perceivably endless, one must be acutely aware of the implications to personal privacy. An individual consumer product or item of clothing can be uniquely identified since each tag carries a single serial number. Researchers have recognized this issue and continue to pursue methods to satisfactorily address the need for “privacy-protecting technologies related to RFID tags.”6(Ari Juels, Ronald L. Rivest, Michael Szydlo, “The Blocker Tag: Selective Blocking of RFID Tags for Consumer Privacy” CCS, p.104)
The ‘Kill-Tag’ approach is one option that fundamentally kills the RFID tags before they reach the consumer; they are killed at time of purchase and can never be re-activated. This method is undesirable with respect to stores wishing to scan their products back into inventory, if they are returned, or product categorization for recycling purposes. Similarly, RFID tags embedded into store coupons, business cards, postage stamps, invoicing return envelopes and collectible items such as CD’s and DVD’s, would be rendered inactive. Therefore the ‘kill tag on purchase’ approach addresses the potential privacy issue but is not a complete solution.
RFID tag’s radio signal may be blocked using a container lined with metal or foil, called a Faraday Cage. This approach facilitates the circumvention of shoplifting detection devices, and is not feasible for products that cannot be placed conveniently in a container. Another related approach that also shields the RF signal is Active Jamming. It is a crude approach where the consumer carries a device that broadcasts radio signals to block or disrupt any nearby reader, even legitimate applications where privacy concerns are not relevant.
Lastly, a general approach that involves the use of cryptographic methods called the ‘Smart’ RFID Tag. Specifically, the ‘smart’ tag holds three possibilities; the ‘hash-lock’ method, where a tag is locked and doesn’t reveal its unique ID until it is unlocked by a reader, equipped with the tags Meta-ID or Personal Identification Number (PIN). This method is not optimal as randomization is required to adjust the PIN number to avoid tracking of tags by their meta-IDs, and the inconvenience to consumers to manage each of their possessions associated PIN’s. The ‘re-encryption’ approach uses external computing agents to periodically encrypt tag serial numbers with a law enforcement public key. This method is resource intensive requiring re-encryption devices and optical verifiers, and therefore not economically practical in the current environment. Finally the ‘silent tree-walking’ approach relies on a secret string code, shared among certain tags or the capability of “the tags to generate their own random pseudo-ID’s before singulation”.7 Ari Juels, Ronald L. Rivest, Michael Szydlo, “The Blocker Tag: Selective Blocking of RFID Tags for Consumer Privacy” CCS, p.105)
Basically, tag readers individually identify the serial numbers of tags on a bit-by-bit query process, resembling a binary ‘tree’. All tags sharing a common prefix ID lie in the same sub tree. A blocker tag is programmed to selectively interfere or passively jam a tag, by simulating all possible serial numbers within a tag’s sub tree, thereby rendering the reader incapable of singulating the tags. If a full blocker tag was used, meaning all possible serial numbers would be blocked, it would in effect, prohibit the reading of all tags. In a retail environment this would adversely affect their inventory.
All the aforementioned approaches entail cryptographic operations on tags, produced by ‘smart’ chips, however they are currently too expensive to implement. In terms of technical advancement, RFID offers the greatest potential to assist in object tracking beyond the supply chain, but personal privacy will be at risk until an acceptable and cost effective method provides protection, suitable to both the organization and the individual.
As the possibilities for implementing RFID continue to grow with limitless applications, some public sector organizations are investigating the benefits of using radio frequency technology, in for example, public libraries. RFID is an alternative to bar coding; it can aid in streamlining staff workflow while improving the customer’s experience. To optimize a library’s system from material check-out to check-in, RFID vendors offer their application protocol interchange, or ‘code’, to a library catalog vendor, which builds the RFID code into its system. The RFID system must then be linked to an automatic checking, sorting and conveyance system to address the libraries incoming materials. In 2003, Fayetteville Public Library (FPL), in Arkansas undertook investigating and implementing and RFID system for its new 88,000 square foot main library. The objective was to man the new library, which was three times the size of the old one, with no additional personnel. To accomplish this, the staff had to be moved from their routine and repetitive tasks to ‘value-added service delivery’- meaning more personalized assistance and increased educational programming. RFID was a logical solution if it could provide an economical tag price, have strong adhesives, be durable, be non-proprietary, provide secure detection on all types of library materials, meet future international standards and allow rapid conversion. After initiating their research into this emerging technology, it became apparent that SIP-the software that translates between the tag and the Integrated Library System (ILS), was not optimal. It added cost and slowed down the transaction time and with most technologies, breakdowns are likely to occur where different systems touch. The solution was to find a system that directly linked the tag or identification code directly to the library catalog and self checkout kiosk vendor, a practice they found commonplace in Europe. With some additional information gathering and research, they “took an active role in shaping the RFID product paradigm,”8 (Steven Thomas, Louise Schaper, Robert Ford, “Fayetteville’s Quest” Library Journal p.25) by asking a vendor to build a self-check module into its ILS, as well as provide the actual self-check device using standard kiosk parts integrated with a third party RFID reader. No interaction between third-party software and the ILS, combined with RFID and all self-check settings residing directly within the ILS, allowed FPL access to a wide range of customizing options for their staff workstations. They saved money on the self-check stations because their ILS vendor used standardized parts used for similar functions in non-library fields. These RFID-based self-check stations don’t require a separate server to run, can be adapted to the next generation of RFID systems fairly inexpensively and do not require additional SIP licenses to be purchased. Their new system had a small footprint, consisting of a flat RFID pad attached to a receipt printer and a highly customized flat-screen monitor with touch screen capability.
The last piece involved linking their conveyance system to their RFID system to expedite the sorting and automatic checking of returned materials. Barcode technology requires books being checked in to be aligned and squared off in order for the barcodes to be read. With RFID technology the tag placement was irrelevant, as the tags could be read as the materials passed on a conveyor between the RFID readers, at a rate of 700,000 items per year. Their RFID implementation has impacted the technological and service-based experiences of its patrons, decentralized circulation, improved library workflow and reduced costs.
Historically, the creation of most new media technologies evolved from military and/or industrial researchers. Radio frequency technology was no exception, IFF (Identification Friend or Foe) technology, was developed during WWII to identify friendly aircraft on radar. As the Cold War ended, major defense and technology contractors were able to transfer their knowledge and efforts to the private sector, therefore expediting the technological research, design, and capabilities of radio waves. Bar coding technology took 50 years to become a mainstay in the industrial environment. Radio Frequency Identification’s advancements and applications, however, have grown exponentially in the last two decades, as every type of industry addresses its benefits.